The Fire Service said people reported streets and homes being flooded, especially in south Dunedin, after overnight rain. The bad weather continued today, with at least 15 roads closed around the city.

South Dunedin resident Neil Ivory said the council had failed to maintain drain systems, which he said caused flooding in parts of the city to be worse than necessary.

He said floodwaters had already entered the bathroom of his house and were close to entering the main part.

"I've got the back door open and I'm sort of monitoring - it's probably about 20-odd mil' below the step at the moment and once it enters over that, well, I'm pretty much buggered, unless I go and live upstairs."

Mr Ivory said he had complained to the council previously about the need to clean the drains.

"I've lived here long enough to know that we've experienced this before. We've complained, the sumps have been cleaned out, and then rains like this don't end up like they are," he said.

"I've been here long enough to know and see and experience how it works."

But Mr Standring said the city's stormwater systems could only cope with a certain level of rain and were at capacity.

The Otago Regional Council said late on Wednesday that it believed the danger of major flooding from the stream had passed.

Dunedin's Civil Defence also said it believed the worst of the city's flooding had passed, with co-ordinator Neil Brown saying the heavy rain had started to ease and the forecast was for it to ease further.

Schools, rest home and hospital affected

By mid-afternoon, the floodwaters had already swamped a rest home on Dunedin's Hillside Road, forcing a full evacuation.

Radius Care general manager of operations Jane Smart said some of Radius Fulton's 94 residents went home to family members but staff had to find alternative accommodation for 78 others.

This rest home on Dunedin's Hillside Road has water in the hallways and several bedrooms. Photo: RNZ / Ian Telfer

The Southern District Health Board has set up an emergency operations centre in Dunedin.

A spokesperson said all critical areas at Dunedin Hospital were functioning well although there were leaks in some buildings and some flooding at a loading dock.

Staff were assisting a number of aged care residential facilities at risk of flooding in the city and trying to identify placement beds if required.

Seaside school St Clair said most of its 450 pupils went home early, with flooding limiting access to the school.

Bathgate Park School did not officially close but most of its students were picked up early by their parents. Principal Whetu Cormick said there was flooding around the school, which is about two kilometres from the sea.

In other parts of Otago, the New Zealand Transport Agency also issued a warning for drivers, with flooding on parts of State Highway 8 between the Lindis Pass and Cromwell. A number of roads were shut in Clutha.

More heavy rain forecast

A heavy rain warning has been kept in place for Dunedin and Clutha but rain is expected to slowly start easing overnight.